What is inside the Oil Search pipe dream?

Within 2 years, industries in central Queensland could be powered by gas from PNG through a 2,500km pipeline. The project is not yet a reality but the share price reflects the belief that it’s a done deal. Is the pipeline a pipe dream?

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In his 1997 book 'Confessions of a Speculator' Victor Neiderhoffer discusses how stocks that suddenly double or triple then tend to turn around and often fall with the same velocity with which they have risen. If one were looking for an Australian example of this phenomenon, Papua New Guinea oil and gas producer, Oil Search Ltd would be as good as any.

In August 1996 Oil Search was trading at $1.40. By mid-January 1997 it was quoted at $2.50 and surprisingly, a downturn in oil prices didn't stop the bull market that lasted until August 1997, when the shares peaked at $4.48...

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